Magazine article American Banker

Travelers Check Deal a Marriage of Big Players

Magazine article American Banker

Travelers Check Deal a Marriage of Big Players

Article excerpt

Thomas Cook Group Ltd.'s pending acquisition of Interpayment Services Ltd., the travelers check subsidiary of London-based Barclays Bank PLC, resulted from two simple and fortuitous decisions: Thomas Cook wanted to buy; Barclays wanted to sell. The deal, announced Aug. 11,.

Barclays' Interpayment unit, with 35,000 sales locations in 145 countries, is the largest issuer of Visa Travelers Cheques, with annual sales of $7 billion.

Thomas Cook had a 13-year marketing relationship with Mastercard International, which was expanded in 1991 when Cook took over the card organization's travelers check operations.

Thomas Cook, the London-based travel and financial-services enterprise 90% owned by Westdeutsche Landesbank of Germany, also sells Euro Travellers Cheque International.

With the Barclays acquisition, Thomas Cook will command 30% of the highly competitive, increasingly concentrated global travelers check market. American Express leads the pack with 44% of the $54 billion market, and Citicorp has a 12% market share.

In a written statement, Alex Jablonowski, managing director of Barclays, said, "We are delighted to have concluded this agreement with Thomas Cook. Their depth of experience and expertise on the travelers checks business will make for a smooth and seamless transition."

Terms were not disclosed, but sources close to the deal said Thomas Cook paid "nowhere near" Interpayment's gross asset value of 800 million pounds, or $1.2 billion.

Graham Rider, managing director with Thomas Cook, called it "a financially attractive price."

"Thomas Cook was actually invited by Visa, who asked if there was anything we could do to help," Mr. Rider said.

Visa, concerned that its largest issuer was looking to get out of the business, went searching for potential buyers.

"Barclays made a strategic decision to focus more on its core retail banking," said David Brancoli, a spokesman for San Francisco-based Visa International. …

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